A recent Charles Schwab report shows that people who have a written retirement plan were 60% more likely to increase their 401(k) contributions and twice as likely to stick to a monthly savings goal than people without a written plan. These statistics should be a loud wake-up call to all clients hoping to not just retire but to retire well!
Unfortunately, not enough people go to the trouble of putting pen to paper or fingers to keyboard. According to the Schwab study, only 24% of Americans say they have a retirement income plan in writing.
The cornerstone of any retirement plan is your target savings rate. Many professionals recommend a target savings rate of 15% per year. If this seems like a daunting amount, get as close as you can, make a goal to increase the amount each year or begin by saving a portion of each pay raise you receive.
Next you’ll need a long-term investment strategy. Most investors will benefit from a portfolio of non-correlated assets. Your portfolio(s) need to generate a return which will build a nest egg that can support you through retirement but also provide protection when the market is turbulent. Our Total Advisor portfolios are carefully crafted in an attempt to get you the most reward with the least amount of risk.
After you’ve determine how much of your disposable income you can stand to part with and you’ve talked to us about the most appropriate portfolio, now we’ll need to help you monitor your plan. An annual review should suffice unless there’s a major change in income, an inheritance, etc… We have some fun (“fun” to us numbers geeks) software that makes these reviews interesting and mostly painless.
Please contact your advisor today to schedule a retirement income plan meeting. We’d be happy to help you get started!